Retirement Plans
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September 26, 2006
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Text of DOL EBSA Press Release on Upcoming Proposed Regs. on Default Investment Alternatives
The text of the proposed regulation is not yet available. Excerpt: "The proposal implements provisions of the Pension Protection Act of 2006 to provide relief to plan fiduciaries who invest the assets of participants in 'qualified default investment alternatives' in the absence of participant investment direction. Upon adoption, the rule will remove a major impediment to automatic enrollment programs created by employers." (Employee Benefits Security Administration, U.S. Department of Labor)

DOL Fact Sheet on Proposed Regs. on Default Investment Alternatives for Individual Account Plans
Excerpt: "[A qualified default investment alternative (QDIA)] must be either managed by an investment manager, or an investment company registered under the Investment Company Act of 1940. A QDIA must be diversified so as to minimize the risk of large losses. A QDIA may not invest participant contributions directly in employer securities. A QDIA may be: Life-cycle or targeted-retirement-date fund; Balanced fund; or Professionally managed account." (Employee Benefits Security Administration, U.S. Department of Labor)

Text of the Seven 401(k) Complaints Filed on September 11, 2006 Alleging Fiduciary Duty Breach Due to Excessive Fees
The PDFs of the documents are available on the target page: Abbott v. Lockheed Martin; Beasley v. International Paper; Loomis v. Exelon; Martin v. Caterpillar; Taylor v. United Technologies; Waldbuesser v. Northrop Grumman; and, Will v. General Dynamics. (Spencer Fane Britt & Browne LLP)

Defined Contribution Plan Sponsors Scrutinize Life Cycle Funds Anew
Excerpt: "A key provision of the Pension Protection Act of 2006 clears the way for companies to begin enrolling workers automatically in 401(k) plans. That means that many plan sponsors are likely to make life cycle funds the default option for workers who do not pick a specific investment option." (Investment News; registration or subscription required)

Survey Describes Employees' Use of New Roth 401(k) Plans
Excerpt: "[I]n its survey of 60,000 employees across three large companies that offer Roth 401(k)s, Hewitt found that 90 days after the Roth 401(k) was introduced, about 8% of employees had chosen to enroll. Of those who opted for the Roth, 14% were in their 20s, compared to 4% in their 50s. Nearly 25% were first-time participants, or those who had not already enrolled in the company's existing traditional 401(k)." (Employee Benefit News)

New Pension Law Criteria Essentially Says Cash-Balance Plans Aren't Age-Discriminatory
Excerpt: "In some of the early conversions . . . older workers saw their projected benefits under the old pension cut by one-third or one-half under the cash-balance plan . . . . Workers also sometimes experienced 'wear-away,' where they didn't earn additional benefits for a period that could last for years . . . . The new pension law prohibits 'wear-away' in conversions made after mid-2005." (The Baltimore Sun via Chicago Tribune: one-time registration required)

Presentation at the Fee-Based Accounts Rule Forum: How Firms Are Adapting to the Rule (PDF)
19 pages. Excerpt: "Beginning January 31 of this year, the rules changed for broker-dealers offering investment advice, as the last provisions of SEC Rule 202(a)(11)-1 swung into effect. The rule, adopted in April 2005, remapped the regulation of broker-dealers offering investment advice in two respects . . . ." (Morgan, Lewis & Bockius LLP)

Opinion: How Much Did Callan Cost the City of San Diego's Pension Plan?
Excerpt: "'The average, or middle-of-the-road manager, outperformed the (Callan-recommended) manager in 11 of 12 quarters, resulting in an opportunity loss of approximately $8 million,' the suit claimed of one underperforming manager cited in the complaint." (Bloomberg News)

California Governor Schwarzenegger Signs Sudan Divestment Bill Which Affects Public Pension Funds
Excerpt: "One of the new laws prohibits the state's huge public pension systems -- the California Public Employees Retirement System and the State Teachers Retirement System -- from investing in companies with active business in Sudan." (The Washington Post; one-time registration required)

Comments on Pensions and Derivatives
Excerpt: "New accounting rules and regulations encourage a paradigm shift that emphasizes risk analysis. Liability-driven investing is the new 'it' topic and, by extension, derivatives are getting a serious look by public and ERISA pension fiduciaries alike." (Pension Risk Matters)

Text of Official Summary of the Women and Retirement Security Bill (PDF)
Excerpt: "The bill will require the IRS develop rules that would exempt small plans from complying with the interim amendment requirements under Rev. Proc. 2005-66. Small plans will be required to adopt conforming amendments for all plan qualification changes by the end of each remedial amendment period cycle prescribed by Rev. Proc. 2005-66." (U.S. Congress via American Benefits Council)

Overview: FDIC Finalizes Rule Increasing Coverage for Certain Retirement Plan Deposits
Excerpt: "The Federal Deposit Insurance Corporation (FDIC) has issued a final rule reflecting the increased coverage for certain self-directed retirement plan deposits up to $250,000." (CCH Pension and Benefits)

Data Chart: Employer Costs for Retirement and Savings Plans, June 2006
Excerpt: "In June 2006, average costs to employers in private industry for retirement and savings benefits were 91 cents per hour worked." (U.S. Bureau of Labor Statistics)

Overview: New Pension Law Rule Changes for 401(k) and Other Defined Contribution Plans
The overview addresses the 2001 EGTRRA Changes; Automatic Enrollment and State Wage and Payroll Laws; Plan Design; Plan Administration and Investments; and, Plan Amendments. (Poyner & Spruill LLP)

New United Kingdom Pension System May Be Costly Flop, According to Consultants
Excerpt: "The amount of money companies will be compelled to pay into the National Pensions Savings Scheme (NPSS) falls short of what is needed to cope with the demands of an rapidly ageing British population, the consulting firm said." (Reuters Limited via Business Insurance)

Links to Items on Executive Comp, Benefits in General

Overview of New Legal Challenges to Employee Waivers and Releases (PDF)
6 pages. Excerpt: "This LawFlash briefly describes the most recent legal challenges to waiver and release agreements and provides a summary of the most important legal requirements affecting the enforceability of waiver and release agreements." (Morgan, Lewis & Bockius LLP)

New York City Trying to Ease Rule on Military Veterans' Pay Reimbursement
Excerpt: "New York City officials said yesterday that they were working to spare more than 1,600 recent veterans some of the financial strain they face from the requirement that they reimburse part of their military or city pay on returning to their city jobs. The requirement calls for the return of the lesser of their military pay or their city pay, which continued during their service." (The New York Times; one-time registration required)

David Walker Offers Some Observations on the Stock Option Backdating Scandal of 2006
Excerpt: "This essay contributes to our understanding of the backdating phenomenon by analyzing the economics of backdating and the characteristics of the firms under investigation." (Boston Univ. School of Law Working Paper via Social Science Research Network)

Newly Posted Events
(Post Yours!)

Aging Workforce Forum: How Prepared is your Organization for the Retirement of the Baby Boomer Generation?
in Illinois on October 19, 2006
presented by CCA Strategies LLC

Annual Conference
in District of Columbia on October 22, 2006
presented by American Society of Pension Professionals & Actuaries (ASPPA)

Annual Conference
in District of Columbia on October 25, 2009
presented by American Society of Pension Professionals & Actuaries (ASPPA)

Annual Conference
in District of Columbia on November 7, 2010
presented by ASPPA (American Society of Pension Professionals & Actuaries)

ASPPA 401(k) Summit
in Florida on February 10, 2008
presented by American Society of Pension Professionals & Actuaries (ASPPA)

Pension Protection Act of 2006
in Texas on October 2, 2006
presented by Executive Benefits Design Group

Pension Protection Act Seminar St. Louis KAnsas City
in Missouri on October 9, 2006
presented by Executive Benefits Design Group

The 2006 Pensions and Retirement Conference
in New York on November 6, 2006
presented by Conference Board, The

Newly Posted Press Releases
(Post Yours!)

How To Set Up A Retirement Plan: A Practical Guide for the Small Business Owner
(Benefit Publications, LLC)

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Employee Benefits Specialist/ID Theft Risk Consultant
for First Priority Resource

Policy Master Analyst
for Great-West Healthcare
in CO

Benefits Analyst IV
for UC Davis Health System
in CA

Actuarial Test Consultant
for Fidelity Investments
in MA, NC

Marketing Administrators - Austin, Dallas, Houston and Tampa
for Benefits Systems, Inc.
in FL, TX

Employee Benefit Client Manager
for Willis
in FL, GA, NC

Sr Compliance Analyst
for T. Rowe Price
in CO, MD

Client Data Management Administrator
for The Online 401(k)
in CA

Pension Analyst
for Platinum Pension Group, LLC
in MA

Retirement Services Specialist
for Administaff
in TX

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